CSI Applied Financial Planning Certification Exam 1 (AFP) : AFP-Exam-1

  • Exam Code: AFP-Exam-1
  • Exam Name: Applied Financial Planning Certification Exam 1 (AFP)
  • Updated: Aug 08, 2026
  • Q & A: 120 Questions and Answers

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CSI AFP-Exam-1 Exam Syllabus Topics:

SectionObjectives
Topic 1: Insurance and Risk Management- Risk mitigation strategies in financial planning
- Life and health insurance fundamentals
Topic 2: Taxation Concepts- Tax-efficient investment strategies
- Personal income tax principles
Topic 3: Retirement Planning- Retirement savings vehicles and planning principles
Topic 4: Investment Planning- Investment products and risk-return profiles
- Asset allocation and portfolio basics
Topic 5: Financial Planning Foundations- Ethics and professional standards in financial advising
- Financial planning process and client relationship management

CSI Applied Financial Planning Certification Exam 1 (AFP) Sample Questions:

1. A client, age 60, is in a low tax bracket today and expects a larger taxable pension after age 65. She has TFSA and RRSP room. Which contribution priority is generally more appropriate?

A) Non-registered account only, because registered accounts are unsuitable after age 60.
B) RRSP only after the client turns 72.
C) RRSP, because withdrawals are tax-free.
D) TFSA, because withdrawals will not increase taxable retirement income.


2. A client borrows $100,000 to invest in a non-registered portfolio expected to generate interest and dividend income. What tax principle is most relevant?

A) Interest on borrowed money may be deductible when the funds are used to earn income from property.
B) Interest deductibility applies only to TFSA contributions.
C) The investment income becomes tax-free because leverage is used.
D) Loan interest is never deductible for individuals.


3. At the first meeting, a financial planner explains her services, compensation, responsibilities, limitations, confidentiality practices, and what information the client must provide. Which document should normally capture these matters?

A) Trade confirmation.
B) Fund facts document.
C) Client agreement letter.
D) Retirement income projection.


4. Two shareholders sign a buy-sell agreement requiring the surviving shareholder to purchase the deceased shareholder's shares at fair market value. What planning tool most directly funds the death-triggered purchase obligation?

A) Corporate-owned or cross-owned life insurance.
B) A personal line of credit in the surviving shareholder's name only.
C) Travel accident insurance.
D) A shareholder RRSP.


5. Dianna is visiting with Karen, her Financial Planner, and is excited to report that she has just bought her dream home. She has also let Karen know she Is meeting with an insurance representative to purchase a whole life insurance to cover her 20-year mortgage. Why might Karen suggest Dianna consider term life insurance instead?

A) The cost of premiums is lower than whole life.
B) The client's health may deteriorate as she gets older.
C) The term policy has a cash value, which can be borrowed against.
D) It is better suited for long term insurance needs.


Solutions:

Question # 1
Answer: D
Question # 2
Answer: A
Question # 3
Answer: C
Question # 4
Answer: A
Question # 5
Answer: A

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